Tuesday, May 04, 2004

The Perils of Partnership

It has been an article of faith amongst Labour ministers and assorted Europhiles that the accession of the impoverished Eastern and Central European countries will not be a problem. They call in aid the experience of Italy, in the original Six and the more recent experience of Spain and Portugal, as well as Ireland, where the rise in prosperity arising from membership meant that their entry to the Community actually benefited them.

Enter two American academics, Grzegorz Ekiert and Andrew Moravcsik, the latter the author of the seminal book on the EU (The choice for Europe), both from Havard University and both with what are regarded by some as Europhile tendencies. They have produced a piece in the 10 May edition of Newsweek International in which they review the current enlargement. In many respects, they take a downbeat view.

Doffing a cap at “new Europe's architects”, who the authors say “have good cause for optimism” about economic growth, they then get down to the nitty-gritty, scenting “a whiff of overconfidence” which taints the air.

The EU's new members, they write, "all hope to follow in the footsteps of Spain and Portugal, which joined in 1986 and thrived. They don't speak as loudly of duplicating Ireland's "economic miracle," where per capita incomes rose from 62 percent of Europe's average in 1973 to 121 percent today, surpassing its former imperial ruler, Great Britain. But that's the dream."

However, reality, according to Ekiert and Moravcsik, is more sobering. “The successes of yore”, they remind us, “were made possible by large infusions of cash. Spain and Portugal received EU subsidies totalling as much as 10 percent of GNP”. As for Ireland, "besides the subsidies it became the preferred launch pad into Europe for American multinationals, which generate more than two thirds of the country's exports and spurred the country's famous high-tech boom. Rural Irish unhappy about EU entry were quickly bought off with generous investments funded by the Union."

Today's EU, they observe, is very different. "From the earliest days of European integration, Germany was the paymaster that made all good things financially possible. But after spending a trillion euros over a decade on the former East Germany, money in Berlin - and hence Brussels - is much tighter. Led by Germany, the six net contributors to the EU budget have called for a break. And despite the funds and factories coming in from America and elsewhere, Eastern Europe is probably too large and too diverse to replicate the Irish experience."

"Nor have all poor EU members done as well as Spain and Ireland. Greece is Exhibit A. Its workers earn a third less than the EU average, roughly on the same level as in 1981. Greek politics and administration are widely viewed as inefficient and corrupt; foreign policy is at best inconsistent. For years officials in Brussels openly regretted allowing Athens to join. It was a case study, Eurocrats agreed, on the dangers of accepting countries not fully prepared for membership."

Among the lessons Ekiert and Moravcsik believe policymakers have drawn from the Greek experience - relevant to the present - is that "joining the EU can create tensions, not only among states but within the new members themselves. It can also be destabilizing for fledgling democracies whose institutions are not yet firmly rooted."

"Consider how EU membership can alter the relationship between governments and the governed. To join, would-be members must embrace modern European values. That fosters democracy, yet by the same token it constrains debate. The requirement that, no questions asked, has been an especially heavy burden for the recent crop of members."

"One consequence of the requirement that tens of thousands of pages of EU regulations be fully implemented is that the governments of the accession states must now administer rules set in Brussels - an agenda that neither they nor their own voters have had much say in choosing."

"Rather than craft new or creative solutions to their countries' problems, leaders have measured their effectiveness by delivering on Brussels' expectations instead of those of their own people. Politics without real policy choice undermines political legitimacy - and breeds public cynicism. Small wonder, then, that people across the region are coming to view their most moderate national parties and parliaments as meaningless rubber stamps."

The authors conclude with the sobering view that the pent-up frustration of citizens denied real influence could be a time bomb, fuelling a populist backlash. And this is from two eminent academics who are broadly sympathetic to the project.

The full article is on Prof Moravcsik’s web site. To read it, click here.

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